Updated: Oct 15, 2020
For any given "bucket of money", there are many ways to work with it to generate a given result. How can we get the clarity we need in order to make a clear decision? We need the criteria to evaluate in order to make a better and more informed decision.
I have determined that there are 6 and an optional 7th criteria to evaluate to determine how you want to manage your money. We'll take a tour of them and define them so you can make a clearer decision that feels right to you.
1. Risk: When we think of risk, we are usually thinking in terms of the risk of loss through no fault of our own. After all, if you're comparing a true investment, the word "investment" could be code for "can lose all your money". (It may not really be likely - even in 2008, the most people lost was about 50%.) How is risk determined? Only by looking through the past and evaluating MPT or Modern Portfolio Theory statistics and the current make-up of the portfolio. If you've watched my YouTube video on "Risk Tolerance and Recapturing Investment Losses", you'd learn about my experience recommending certain 'moderate' mutual funds. And when the market dropped -50%... these funds dropped about -30% and -40%.